JPMorgan Chase is pushing ahead with talks to buy a large Brazilian hedge fund and private equity group, in spite of impending US legislation designed to limit the involvement of commercial banks in such activities.
People close to the situation said the US financial group was in advanced discussions to buy Gávea Investimentos, an asset management company that manages about $5.3bn in assets and was founded by Armínio Fraga, the former president of Brazil's central bank. No deal has yet been reached and the talks could still collapse, but JPMorgan's decision to go ahead with the discussions highlights its confidence that the new regulatory regime will not prevent deposit-taking banks from owning hedge funds.
The so-called “Volcker rule” would ban banks from trading on their own account and limit their ability to invest in or “sponsor” hedge funds and private equity.